The Stock Market is now back in a bull market after experiencing the shortest bear market in history – this is what that means and how you should invest from here – Enjoy! Add me on Instagram: GPStephan
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The Average Bear Market lasts just under 1.4 years, with an average loss of about 41%… throughout history – there are ALWAYS going to be times that prove to be an outlier, and most of the time – the market is never just going to follow “the average” every time.
The previous bear market record holder before TODAY was back in 1990, where the markets dropped about 20%…and then rebounded within 3 months, leading us through a VERY strong bull market for the following 8 years.
But, that doesn’t mean that JUST because we’ve entered a bull market that we’re going to see a run up in the markets for another 48+ months…if we start going back in history, things get VERY interesting…since 1940, the shortest Bull Market we have EVER HAD was just after the Dot Com bubble where the markets rose 21.4% over 3.4 months, before then declining another 33.8% during the FOLLOWING 9 months.
During the 1920s and 1930s, there are plenty of examples bull markets lasting just DAYS…like, a 23 DAY LONG Bull market, with a 25% gain. After that, there was a 42% drop…followed by another 1 months of a bull market going back up 30%…although, if we remove the volatility and simply base things off of a 6 month rolling time period…the shortest UNINTERRUPTED BULL MARKET we’ve had was 2.5 years.
So, just given this context…even though, on average, bull markets do LAST LONGER than bear markets…history has shown us that volatile could absolutely exist, and seeing drops or gains of 20% in either direction isn’t as uncommon as you would think along the way.
After that – lets talk about APPLE and TESLA STOCK SPLIT. So, why, all of a sudden, are stock splits sending the price even higher?
Well…honestly, it’s for a few reasons – but the easiest, most likely answer is that it’s PURELY PSYCHOLOGICAL, and investors feel like the stocks have more potential of making money the cheaper they are. As for whether or not stock split companies have a history of continuing to rise in price…the answer is, it’s unclear. Generally, stocks only split when they’ve seen a large increase in price, and they believe their stock will continue to grow in value…but, also, NOW, a stock split seems to me like a reason for people to pile in, creating the self-fulfilling prophecy that it will go up because others will buy it.
Finally – de-listing of NON US Companies on the stock exchange. The US wants to put strict regulation on what companies we can invest in, because they’re concerned that US Investors would be at risk of potential issues. When it comes to this, I’m a believer that transparency and openness IS EXTREMELY important when it comes to investing in a company – and there SHOULD be third party, verifiable audits if they’re a publicly traded company. But, right now – there isn’t a way for us to do that on a wide scale, HERE.
Depending on who you ask, this might be a move in the right direction for further transparency and it could weed out some of the bad apples – but, it also sets the precedent that everyone must comply with these regulations, otherwise you won’t be listed on the US Stock Exchange.
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